OCTOBER/NOVEMBER 2013 SA MINES & ENERGY JOURNAL
FEATURE
15
SA's most obvious challenges
are the need for infrastructure
such as airstrips and sealed
roads, workforce requirements
and overcoming the technological
difficulties associated with
extraction from high temperature,
high pressure reser voirs.
An additional commercial
challenge will be negotiating the
price of gas with international
customers who are increasingly
anxious with Australia's high,
oil-linked contract prices.
Paul Bloxham, Chief Economist
at HSBS bank is carefully optimistic.
"Australia's contract
based market bodes well for
investment here providing
pricing security, as opposed to
the US's volatile spot pricing.
"
He says although Australia
is a high cost destination, with
investment peaking for large
sections of our resources, the
pressures contributing to this
environment are starting to ease.
"Demand wise, there has been
much talk of China slowing down,
but their economy is so much
larger than it was, it needs to
grow much less to generate the
same demand,
" says Mr Bloxham.
"And China is not the only
story. In Korea, there are
energy restrictions right now.
They have an energy problem
now, as does Japan.
"
In Australia, seven major
LNG projects have secured
contracts already, with the
first to become operational in
2014/2015. Contracts are locked
in with Japan, Korea and India.
"The prices are set -- that sale of
gas will happen,
" says Mr Bloxham.
Most agree that gas requirements
for LNG contracts will likely be
met immediately by existing
conventional and CSG supplies,
with other unconventional sources
necessary to offset domestic
shortfall and buffer international
exports. But both Cooper Basin
conventional and interstate
CSG are declining reser ves.
Mr Goldstein hopes the
acceptance of gas for transport
will fuel additional demand.
"It's happening in the US and
it's starting to happen here,
"
he says, referring to Shell's
announcement this year to
increase its LNG refuelling stations
from 17 to 34 in coming years.
Regardless of any new
demands, domestic certainties
and export opportunities provide
ample encouragement to follow
Whilst the
Australian market
is young, SA has
the advantage
of the Cooper
likely hosting
Australia's rst big
unconventional
gas development
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Flying over the Cooper Basin